## Are you sure?

This action might not be possible to undo. Are you sure you want to continue?

**Chapter 4 Understanding Money and Its Management
**

Nominal and Effective Interest Rates

4.1

x Nominal interest rate:

1.15% 12 13.8% r u

x Effective annual interest rate:

12

(1 0.0115) 1 14.71%

a

i

4.2

(a) Monthly interest rate: 13.9% 12 1.1583% i y

Annual effective rate:

12

(1 0.01158) 1 14.82%

a

i

(b)

2

$3, 000(1 0.01158) $3, 069.90

4.3 Assuming weekly compounding:

52

6.89%

0.0689

(1 ) 1 0.07128

52

a

r

i

4.4

x Interest rate per week

Given : $500, 40, 16 weeks P A N

$500 $40( / , ,16)

3.06% per week

P A i

i

**x Nominal annual interest rate:
**

% 12 . 159 52 % 06 . 3 u r

x Effective annual interest rate:

52

(1 3.06%) 1 379.39%

a

i

Contemporary Engineering Economics, Fifth Edition, by Chan S. Park. ISBN: 0-13-611848-8

© 2011 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved.

This material is protected by Copyright and written permission should be obtained from the publisher prior to any prohibited reproduction,

storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise.

For information regarding permission(s), write to: Rights and Permissions Department, Pearson Education, Inc., Upper Saddle River, NJ 07458.

Page | 3

4.10 No. The debt interest rates are higher than the return on the investment funds.

Pay down the highest-interest debt, which is the charge account debt.

4.11 Bank A:

365

0.07

1 1 7.25%

365

a

i

§ ·

¨ ¸

© ¹

Bank B:

0.069

1 7.14%

a

i e

The difference between two banks after 2 years:

> @ $3, 000 ( / , 7.25%, 2) ( / , 7.14%, 2) $6.85 F P F P

Compounding More Frequent than Annually

4.12

F Pe

rN

$5,000e

(0.06u10)

= $9,110.59

4.13

P Fe

rN

$5,000e

(0.06u5)

= $3,704.09

4.14

F Pe

rN

$3,000e

(0.08u5)

= $4,475.47

4.15

0.06

2

N

P Pe

ln 2 0.06N

11.55 years N

4.16

(a) Nominal interest rate:

1.95% 12 23.4% r u

(b) Effective annual interest rate:

12

(1 0.0195) 1 26.08%

e

i

(c)

Contemporary Engineering Economics, Fifth Edition, by Chan S. Park. ISBN: 0-13-611848-8

© 2011 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved.

This material is protected by Copyright and written permission should be obtained from the publisher prior to any prohibited reproduction,

storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise.

For information regarding permission(s), write to: Rights and Permissions Department, Pearson Education, Inc., Upper Saddle River, NJ 07458.

Page | 4

3 (1 0.0195)

log3 log1.0195

56.89 months

N

P P

N

N

ଃ 56.89 / 12 = 4.75 years

(d)

0.0195

3

ln(3) 0.0195

56.34 months

N

e

N

N

ଃ 56.34 / 12 = 4.69 years

4.17

8

0.08

$15, 000(1 ) $17, 575

4

F

4.18

365

0.06

(1 ) 1 6.183%

365

a

i

6

$15, 000( / , 6.183%,12) $15, 000( / , %,12 365)

365

F F P F P u

= $ 30,815

4.19

(a)

20

0.09

$7,890(1 ) $19, 028.42

2

F

(b)

60

0.08

$4, 500(1 ) $14, 764.64

4

F

(c)

84

0.12

$29, 800(1 ) $68, 740.34

12

F

4.20

(a) Quarterly interest rate = 1.5%

3 (1 0.015)

log3 log1.015

73.78 quarters

N

P P

N

N

ଃ 73.78 / 4 = 18.5 years

(b) Monthly interest rate = 0.5%

Contemporary Engineering Economics, Fifth Edition, by Chan S. Park. ISBN: 0-13-611848-8

© 2011 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved.

This material is protected by Copyright and written permission should be obtained from the publisher prior to any prohibited reproduction,

storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise.

For information regarding permission(s), write to: Rights and Permissions Department, Pearson Education, Inc., Upper Saddle River, NJ 07458.

Page | 5

3 (1 0.005)

log3 log1.005

220.27 months

N

P P

N

N

ଃ 220.27 / 12 = 18.42 years

(c)

0.06

3

ln(3) 0.06

18.31 years

N

e

N

N

4.21

(a) Quarterly effective interest rate = 2.25%

$8, 000( / , 2.25%, 60) $261, 992 P P A

(b) Quarterly effective interest rate = 2.2669%

$8, 000( / , 2.2669%, 60) $260, 955 P P A

(c) Quarterly effective interest rate = 2.2755%

$8, 000( / , 2.2755%, 60) $260, 430 P P A

4.22

( / , , 20) $5, 000( / , 2.02%, 20) $121, 729 F A F A i F A

4.23

(a) Quarterly effective interest rate = 2.25%

F $4,000( F / A, 2.25%, 40) $255,145

(b) Quarterly effective interest rate = 2.2669%

F $4,000(F / A, 2.2669%, 40) $256,093

(c) Quarterly effective interest rate = 2.2755%

F $4,000(F / A, 2.2755%, 40) $256,577

Contemporary Engineering Economics, Fifth Edition, by Chan S. Park. ISBN: 0-13-611848-8

© 2011 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved.

This material is protected by Copyright and written permission should be obtained from the publisher prior to any prohibited reproduction,

storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise.

For information regarding permission(s), write to: Rights and Permissions Department, Pearson Education, Inc., Upper Saddle River, NJ 07458.

Page | 6

4.24 (d)

4.25

0.079/ 4

1 1.9946%

a

i e

$10, 000( / ,1.9946%, 20) A A P

= $ 611.25

4.26

(a) Monthly effective interest rate = 0.74444%

$1, 500( / , 0.74444%, 96) $209,170 F F A

(b) Monthly effective interest rate = 0.75%

$1, 500( / , 0.75%, 96) $209, 784 F F A

(c) Monthly effective interest rate = 0.75282%

$1, 500( / , 0.75282%, 96) $210, 097 F F A

4.27 (b)

0 1 2 3 4 5 6 7 8 9 10 11 12

$1,000

Effective interest rate per

payment period

i = (1 + 0.01)

3

– 1

= 3.03%

Contemporary Engineering Economics, Fifth Edition, by Chan S. Park. ISBN: 0-13-611848-8

© 2011 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved.

This material is protected by Copyright and written permission should be obtained from the publisher prior to any prohibited reproduction,

storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise.

For information regarding permission(s), write to: Rights and Permissions Department, Pearson Education, Inc., Upper Saddle River, NJ 07458.

Page | 12

Then, compute the total present worth of the energy cost savings over 5 years.

P $246.85 $246.85( P / F,0.5%,12) $246.85(P / F,0.5%, 24)

$246.85(P / F,0.5%,36) $246.85( P / F,0.5%, 48)

$1,098.97

Continuous Payments with Continuous Compounding

4.51 Given

i 10%, N 10years, and A $95,000 u 365 $34,675,000

x Daily payment with daily compounding:

P $95,000( P / A,

10%

365

,3650) $219,170,331.48

x Continuous payment and continuous compounding:

P Ae

rt

dt

0

10

³

$34,675,000

e

(0.10)(10)

1

0.1e

(0.10)(10)

ª

¬

«

º

¼

»

$219,187,803.77

ଃ The difference between the two compounding schemes is only $17,472.27

4.52 Given ! 11%, " 3, #

0

$500, 000, #

"

$40, 000, and 0 d $ d 3,

) (t f

$500,000

$40,000

0 1 2 3

t

Contemporary Engineering Economics, Fifth Edition, by Chan S. Park. ISBN: 0-13-611848-8

© 2011 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved.

This material is protected by Copyright and written permission should be obtained from the publisher prior to any prohibited reproduction,

storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise.

For information regarding permission(s), write to: Rights and Permissions Department, Pearson Education, Inc., Upper Saddle River, NJ 07458.

Page | 14

42 . 875 , 8 $

) 8 %, 5 . 1 , / )( 8 %, 5 . 2 , / )( 4 %, 2 , / ( 000 , 2 $

) 8 %, 5 . 1 , / )( 8 %, 5 . 2 , / ( 000 , 2 $ ) 8 %, 5 . 1 , / )( 4 %, 5 . 2 , / ( 000 , 3 $

) 8 %, 5 . 1 , / ( 000 , 2 $ ) 4 %, 5 . 1 , / ( 000 , 2 $

F P F P F P

F P F P F P F P

F P F P P

(b) Find F:

186 , 13 $

) 4 %, 2 , / )( 8 %, 5 . 2 , / )( 8 %, 5 . 1 , / (

P F P F P F P F

(c) Find A, starting at 1 and ending at 5:

! " "(! / #, 2%, 4) "(! / #, 2.5%, 4)(! / #, 2%, 4)

"(! / #, 2.5%, 8)(! / #, 2%, 4) "(! / #,1.5%, 4)(! / #, 2.5%, 8)(! / #, 2%, 4)

5.9958"

"

$13,186

5.9958

$2,199.21

4.57

(a)

26 . 305 , 1 $

) 12 %, 5 . 0 , / )( 24 %, 75 . 0 , / )( 12 %, 5 . 0 , / ( 500 $

) 12 %, 5 . 0 , / )( 24 %, 75 . 0 , / ( 500 $

) 12 %, 5 . 0 , / )( 12 %, 75 . 0 , / ( 300 $ ) 12 %, 5 . 0 , / ( 300 $

F P F P F P

F P F P

F P F P F P P

(b)

$1, 305.26 $300( / , , 2) $500( / , , 2)( / , , 2)

7.818% per year

P A i P A i P F i

i

**4.58 Since payments occur annually, you may compute the effective annual interest
**

rate for each year.

% 416 . 9 1 )

365

09 . 0

1 (

365

1

i , % 417 . 9 1

09 . 0

2

e i

$400( / , 9.416%, 2)( / , 9.417%, 2) $250( / , 9.416%,1)( / , 9.417%, 2)

$100( / , 9.417%, 2) $100( / , 9.417%,1) $250

$1, 379.93

F F P F P F P F P

F P F P

4.59

0.06 0.08

1 2

1 6.18%, 1 8.33% i e i e

Contemporary Engineering Economics, Fifth Edition, by Chan S. Park. ISBN: 0-13-611848-8

© 2011 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved.

This material is protected by Copyright and written permission should be obtained from the publisher prior to any prohibited reproduction,

storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise.

For information regarding permission(s), write to: Rights and Permissions Department, Pearson Education, Inc., Upper Saddle River, NJ 07458.

Page | 15

0.06 0.08

$1, 000

$1, 000( / , 6.18%,1)( / , 8.33%,1)

$1,150.25

F e e

F P F P

Amortized Loans

4.60 Loan repayment schedule for the first 6 months:

End of

month Interest Payment

Principal

Payment

Remaining

Balance

0 $0.00 $0.00 $25,000.00

1 $125.00 $358.32 $24,641.68

2 $123.21 $360.11 $24,281.57

3 $121.41 $361.91 $23,919.66

4 $119.60 $363.72 $23,555.93

5 $117.78 $365.54 $23,190.39

6 $115.95 $367.37 $22,823.03

4.61

(a)

(i) ) 24 %, 75 . 0 , / ( 000 , 10 $ P A

(b)

(iii) ) 12 %, 75 . 0 , / (

12

A P A B

4.62 Given information:

9.45%/ 365 0.0259% per day i , N = 36 months.

x Effective monthly interest rate, i = (1 0.000259)

30

1 0.78% per month

x Monthly payment, A = $13,000( A/ P,0.78%,36) $415.58per month

x Total interest payment, I = $415.58 36 $13, 000 $1, 960.88 u

4.63

(a) Using the bank loan at 9.2% compound monthly

Contemporary Engineering Economics, Fifth Edition, by Chan S. Park. ISBN: 0-13-611848-8

© 2011 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved.

This material is protected by Copyright and written permission should be obtained from the publisher prior to any prohibited reproduction,

storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise.

For information regarding permission(s), write to: Rights and Permissions Department, Pearson Education, Inc., Upper Saddle River, NJ 07458.

Page | 19

x Monthly repayment:

046 , 1 $ ) 360 %, 75 . 0 , / ( 000 , 130 $ P A A

x Effective interest rate on this loan

$126,100 $1, 046( / , , 360)

0.7787% per month

P A i

i

ଃ

12

(1 0.007787) 1 9.755% per year

a

i

4.73

(a)

$50,000 $7,500(P / A, i,5) $2,500(P / G, i,5)

i 6.914%

(b)

P = $50,000

Total payments = $7,500 + $10,000 + ˎ + $17,500GdG$62,500

Interest payments = $3,456.87 + ˎGRG$1,131.66GdG$12,500

End of month Interest Payment

Principal

Payment

Remaining

Balance

0 $0.00 $0.00 $50,000.00

1 $3,456.87 $4,043.13 $45,956.87

2 $3,177.34 $6,822.66 $39,134.21

3 $2,705.64 $9,794.36 $29,339.85

4 $2,028.48 $12,971.52 $16,368.34

5 $1,131.66 $16,368.34 $0

4.74 Given Data: r = 7% compounded daily, N = 360 years

x The effective annual interest rate is

% 25 . 7 1 ) 365 / 07 . 0 1 (

365

a

i

x Total amount accumulated at the end of 25 years

$75, 000 u 5% $3, 750

! $3, 750(! / ", 7.25%, 25) $150(! / #, 7.25%, 25)

$3, 750(! / ", 7.25%, 25) $150($ / #, 7.25%, 25)(! / $, 7.25%, 25)

$329, 799.78

Contemporary Engineering Economics, Fifth Edition, by Chan S. Park. ISBN: 0-13-611848-8

© 2011 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved.

This material is protected by Copyright and written permission should be obtained from the publisher prior to any prohibited reproduction,

storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise.

For information regarding permission(s), write to: Rights and Permissions Department, Pearson Education, Inc., Upper Saddle River, NJ 07458.

Page | 21

4.77

(a)

$3, 000 $156.04( / , , 24)

1.85613% per month

1.85613% 12 22.2735%

P A i

i

r

u

(b)

85 . 664 , 1 $ ) 12 %, 85613 . 1 , / ( 04 . 156 $ A P P

4.78

$5, 025 $146.35( / , , 48)

1.46% per month

$146.35( / ,1.46%, 33) 3,810.91

P A i

i

P P A

**Loans with Variable Interest Rates
**

4.79

(a) Amount of dealer financing = $15,458(0.90) = $13,912

! $13, 912(! / ",11.5%/ 12, 60) $305.96

(b) Assuming that the remaining balance will be financed over 56 months,

#

4

$305.96(" / !,11.5%/ 12, 56) $13, 211.54

! $13, 211.54(! / ",10.5%/ 12, 56) $299.43

(c) Interest payments to the dealer:

I

dealer

$305.96 u 4 $13, 211.54 $13,912 $523.38

Interest payments to the credit union:

union

$299.43 56 $13, 211.54 $3, 556.54 I u

4.80 Given: purchase price = $155,000, down payment = $25,000

x Option 1: 7.5%/12 0.625% per month i , N = 360 months

Contemporary Engineering Economics, Fifth Edition, by Chan S. Park. ISBN: 0-13-611848-8

© 2011 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved.

This material is protected by Copyright and written permission should be obtained from the publisher prior to any prohibited reproduction,

storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise.

For information regarding permission(s), write to: Rights and Permissions Department, Pearson Education, Inc., Upper Saddle River, NJ 07458.

Page | 21

4.77

(a)

$3, 000 $156.04( / , , 24)

1.85613% per month

1.85613% 12 22.2735%

P A i

i

r

u

(b)

85 . 664 , 1 $ ) 12 %, 85613 . 1 , / ( 04 . 156 $ A P P

4.78

$5, 025 $146.35( / , , 48)

1.46% per month

$146.35( / ,1.46%, 33) 3,810.91

P A i

i

P P A

**Loans with Variable Interest Rates
**

4.79

(a) Amount of dealer financing = $15,458(0.90) = $13,912

! $13, 912(! / ",11.5%/ 12, 60) $305.96

(b) Assuming that the remaining balance will be financed over 56 months,

#

4

$305.96(" / !,11.5%/ 12, 56) $13, 211.54

! $13, 211.54(! / ",10.5%/ 12, 56) $299.43

(c) Interest payments to the dealer:

I

dealer

$305.96 u 4 $13, 211.54 $13,912 $523.38

Interest payments to the credit union:

union

$299.43 56 $13, 211.54 $3, 556.54 I u

4.80 Given: purchase price = $155,000, down payment = $25,000

x Option 1: 7.5%/12 0.625% per month i , N = 360 months

Contemporary Engineering Economics, Fifth Edition, by Chan S. Park. ISBN: 0-13-611848-8

© 2011 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved.

This material is protected by Copyright and written permission should be obtained from the publisher prior to any prohibited reproduction,

storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise.

For information regarding permission(s), write to: Rights and Permissions Department, Pearson Education, Inc., Upper Saddle River, NJ 07458.

Page | 22

x Option 2: For the assumed mortgage,

1

$97, 218 P ,

i

1

5.5%/ 12 0.458% per month ,

1

300 months N ,

1

$597 per month A ;

For the 2

nd

mortgage 782 , 32 $

2

P ,

2

9%/12 0.75% per month i ,

2

120 months N

(a) For the second mortgage, the monthly payment will be

!

2

"

2

(! / ", #

2

, $

2

) $32, 782(! / ", 0.75%,120) $415.27

$130, 000 $597( / , , 300) $415.27( / , ,120)

0.5005% per month

0.5005% 12 6.006% per year

6.1741%

a

P A i P A i

i

r

i

u

(b) Monthly payment

x Option 1: 97 . 908 $ ) 360 %, 625 . 0 , / ( 000 , 130 $ P A A

x Option 2: $1,012.27 (= $597 + $415.27) for 120 months, then $597 for

remaining 180 months.

(c) Total interest payment

x Option 1: % $908.97 u 360 $130, 000 $197, 229.20

x Option 2: 4 . 932 , 98 $ 000 , 130 $ 4 . 932 , 228 $ I

(d) Equivalent interest rate:

$908.97( / , , 360) $597( / , , 300) $415.27( / , ,120)

1.2016% per month

1.2016% 12 14.419% per year

15.4114%

a

P A i P A i P A i

i

r

i

u

**Loans with Variable Payments
**

4.81

$10, 000 ( / , 0.6667%,12) ( / , 0.75%,12)( / , 0.6667%,12)

22.05435

A P A A P A P F

A

ଃ 43 . 453 $ A

Contemporary Engineering Economics, Fifth Edition, by Chan S. Park. ISBN: 0-13-611848-8

© 2011 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved.

This material is protected by Copyright and written permission should be obtained from the publisher prior to any prohibited reproduction,

storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise.

For information regarding permission(s), write to: Rights and Permissions Department, Pearson Education, Inc., Upper Saddle River, NJ 07458.

photocopying.@:AB$$ 9?<8?>:=>$$ 9?.2735% Monthly payment.360) All $126. $1. ISBN: Page | 14 (iii) Upper A( P / A. Pearson Education.12)( Pe F .664.9. 000 interest rate and continuous compounding: (a)FEffective e payment on this loan P $300 P 6.57 0. recording.$ 9=@<>@A:>?$$ 98$$ Contemporary Engineering Economics.<:88$$ 9?<@:?. NJ.@:AB$$ D$ 9><=BB:>?$$ 9@<ADD:@@$$ 9>C<=>?:D=$$ 4.04( P / A.04( P / A. -+.1)( F $ ISBN: 0-13-611848-8 Contemporary Engineering$1.1.417%. "!! Park.416%.54 I union $299. ! !"#$ 4.500(P .D$$ 9=@<>@A:>?$$ Loans (b) Variable Interest Rates with $40...07 / 365) 365 Page | 12 $3.04( P / A.5%.18%.. by Chan S.87 + 9>. Pearson Education.58per month 9B. /(P.month1 For information regarding permission(s).12)$1.416%. i !"#$%&$ .458(0..000 >$ 9>.74 Given Data: r = 7% Rights and Permissions Department.8.000( P 130.-.09 1 $62.10)(10) Amortized Loans (b) $219.+-($.5% /12 0. 48) (a) Using the bank loan at 9.0. 4.E< D.2%211.the first 6 months:.912 (a) system. NJ 07458.379.675.26 schedule for .000( B.24) .?:. Inc./0'+"($ you may compute the 7/4/"2+$ annual interest . 4. . or likewise.79 This material is protected by Copyright and written permission should be obtained from the publisher prior to any prohibited reproduction.78 B$ 9?BC:?C$$ 9.416 + .?=>D8:?D$$ $500.331.46%. Upper Saddle River. !#-*)%.12) Saddle River.62 Given information: %"&'! ( "$"")*+is"&$. photocopying.i.1"213/4$ 5+'/1"1"6$ <$ 9>>C:C@$$ 9?B<:<A$$ 9.<=888:88$$ (b) for 8$ 4.04( P / A.098. Inc. Inc.75 $500( P /Rights.8F! G #< 000 $1. Fifth Edition.85613% 12 22. Given ! !!"# " $# #% &'%%# %%%# #" &(%# %%%# )*+ % $ $# $50.will 25 financed over 56 months.5%. Fifth Edition. i.06 Continuous e0.85613% i 6. starting$1.18%.48) (c) Find A.000( A / P.E< D. mechanical.36) $415. 2) $500( P / A (a) (a) i $3.24)( P / F . / F .:@?$$ 9DC<>>C:A.0.>$$ i2 e 1 f (t ) (1 ?$ 365 $156. $1. All rights reserved.260.100 Ae rights be A. 9>.46% per month 9><?.85613%. Inc.8F! G "< B:D. 025 $1.500 (b) i Total payments = $7. NJ 07458.06 1>$ 6. N Rights and Permissions $95... should 0 storage in a retrieval system.$13.9. or likewise. down payment = $25.. All rights reserved.?:8?$$ 8$ 98:88$$ 98:88$$ 9. 2)( P / F .75%.i.< 888 $13.#+*/ Monthly repayment: or by any means.150.12) © 2011 Pearson Education. ISBN: 0-13-611848-8 © 2011 Pearson Education.35( P / A.59 P $146.046 P $95.0.61 4.85 I dealer 9><$305.'" ( rate.5) $7.12) Economics. Inc. i.0.24) $246.93 $146..25 written permission046( P / obtained 5%. or transmission in any form or by any means.75%.305.be % (a) i 0. NJ.8<888:88$$ $5.0.5) The difference between the twoAcompounding schemes is only $17. electronic. i.90) mechanical.77 4. B12 Saddle River.H 9=.9.625% per month .85613% per month Total amount accumulated ! !"#$ &"")*/'! ( "$"-)*+ ( "&$ *.E 9>< A / P.97 at 1 and ending at 5: Contemporary Engineering Economics.9. Upper Saddle River./0'+"($ 4.43 56 $13. i. write to: 12 $34. photocopying.500 %$10. 000( FFifth Edition. 000 $156.54 $13.456.360) $1.0001 9.. electronic.914% per month i '%"()$ $$$$*"(+. Upper Saddle River.58 Since payments occur annually.8 (c) Interest payments to the dealer: (b) Total interest payment.HF! G $< B:D.9>><:D<$$ F / P. Givenpermission(s). Inc.12) Park.85613%.08 $1. 0.1"213/4$ 5+'/1"1"6$ 1..51 regarding)(.000 .1) 10 © 2011 Pearson Education.000 i 10% For information Continuous Payments with Continuous Compounding .12) $1./0'+"($ $100( F / P. ISBN: 0-13-611848-8 © 2011 Pearson Education.0. Upper Saddle River. by Chan 9=<=>=:@@$$ 0-13-611848-8 S. i = (1 "&$*.186 P $246.0 5%.0.755% per year i.46% per month P $146.and Permissions(0.1.5%. recording.3650) %.33% 9C<BC?:>@$$ (i) $10?$ ( A / P. NJ.0. i2 e0.$$ i1 e0.810. photocopying.7787% per 0.33%.12)( P / F . electronic. compound monthly i 1.170.0.1e(0. Upper Fi. 365 4. i.75$219.48 A $ / A.@>:<C$$ + .33) 3.E< D.36) $246. 2) $250( F / P.H 9=.12) $ and P This material is protected by Copyright 500( P / F .664 Interest payments = $3. Upper Saddle River.5%. 48) =$ i 1.78%.0259% per day .78 Page | 19 $5.E< D.912 B:D. -$#+. All rights reserved.90) = $13.?=D>D:BB$$ F $400( F / P.810. Park.9.458(0.10)(10) %.0 by Chan S.8F$ G #< $523.+-($.<C. or of dealer any form or by $15.88 P $156..0. !#-*)%.500(P / G.85(P / F.$ 0.E< D. = 36 months.8F! G B:D.000259)30 1 0. 2)( F / P.556.000 + 9?B8:>>$$ 9. Inc.000 !"#$%&$'%"()$ *"(+..0. Daily Upper Saddle with daily compounding: This material is protected by Copyright and written permission should be obtained from the publisher prior to any prohibited reproduction.91 (a) 9D<B8. Page | 21 (b) Assuming that the remaining balance will be financed over 56 months.60 Loan $1.33) 3.417%.08 1 8.38 9>DC< BCC:BA 4.85( P / F.=@.5%.000 365 $34.52 rate P = each year.73 4. N = 360 months (a) Amount of dealer financing = $15.63 Interest payments to the credit union: 4.472.)* For information regarding permission(s). 9.000 $156. = $13.>:A>$$ 9?B>:D>$$ .1.417% .818% per /year.75%.$$ 9. &' Copyright and written permission should be storage in a retrieval system.78% per month Effective monthlyiinterest at the end of 25 years 1. or likewise.417%.5%.187.75%. B:D. For information regarding permission(s).000. i.-..77 i 9.($+ storage in a retrieval " system.9.35( P / A. and A Department.912 !"#$ %"&'! ( "$"")*+ ( "&$. Pearson Education. N = 360 years A$ 9>>D:B8$$ 9?B?:C..rt dt reserved. (1 $1a305. !&%%)/# r 1.2735% 98:88$$ 98:88$$ 9. recording.131..A=.$$ 9. (b) Assuming thatathe(remaining balance1 N7. 2) .500 9. / Department.6685 $12.54 $3.09 ) 365 1 9. mechanical. 24) #/ !#-*)%. A = . write to: compounded daily. mechanical.500 P $1.675.77 4.H B./ P. NJ 07458. 025 $146. The effective annual interest rate ( 4.12) $246. NJ 07458.1.27 $50. electronic.300( P / F .85(P / F. 3 0 1 2 t storage in a retrievalAmounttransmission infinancing =any means. "!! " ##+()%# &'!! ## $()%# *'!! " ## $%# This material is protected by"!! " ##$()%# *'!! " ##$%# &' obtained from the publisher prior"to any prohibited reproduction.0. Pearson Education.000 9D<8DA:?A$$ 9=D<CB=:. effective r 1.85613% 12 22.960.A=BA>:B@$$ 0 $17.?=<<<:D?$$ Contemporary Engineering Economics. 2) repayment $300( P / A i. or transmission in any form or by any means. 000 7. write to: Rights 10% and Permissions Department.0.85 $246.46%.000 Page | 15 Loans with Variable Interest Rates Option 1: i 4.58 36 $13.007787) 0. NJ.)*" . 4.35( P / A.35( P / A.45% / 365 1 0.1) $250 7/4/"2+$ 2) $100( 4. recording.211.91 4.85( P / F..1)( F / P. Inc.79 ! 7.write to:10 years. Park. or transmission in any form )(. 24) $2.24)( P / F . payment River.96 "<4 $13.417%."Fifth$%# &'by Chan S.from the publisher prior to any prohibited reproduction. I = $415.80 Given: purchase price = $155. .H ! 9>< B.5%.803. !"#$ &"")*/ !$"")*+ ( 0. " ##$()%# &'!! " ## $%# &' ! " "!! ## Edition./0'+"($ . or likewise.

5005% 12 6.2016% per month r 1. then $597 for remaining 180 months.2016% 12 14.000 $98.360) $597( P / A. ISBN: 0-13-611848-8 © 2011 Pearson Education. For information regarding permission(s).300) $415..4 (d) Equivalent interest rate: $908.05435 A $453.27) for 120 months.120) i 0.4 $130. For the 2nd mortgage P2 $32. Inc.81 $10. i.. All rights reserved. This material is protected by Copyright and written permission should be obtained from the publisher prior to any prohibited reproduction.782 . photocopying.000( A / P. N 2 120 months (a) For the second mortgage.120) i 1.43 Page | 22 . P 1 $97. 0. NJ. by Chan S.27( P / A. i.Contemporary Engineering Economics.!*% &/. Inc.6667%. Option 2: For the assumed mortgage. or likewise.97( P / A.932.27 (= $597 + $415. A1 $597 per month .1741% (b) Monthly payment Option 1: A $130. or transmission in any form or by any means. i. mechanical.012. i2 9% /12 0.12) A( P / A. 0. 000 A A( P / A.625%. N1 300 months . 218 . (c) Total interest payment Option 1: % Option 2: I &0*)+0( '1* &. electronic.0. i.360) $908.300) $415. recording.419% per year ia 15.458% per month .97 Option 2: $1. Fifth Edition.5005% per month r 0. the monthly payment will be !! "! "! # "$#! $ $ ! % &'!$ ()!"! # "$ *+(.12)( P / F .4114% Loans with Variable Payments 4. 000 $597( P / A.006% per year ia 6.6667%.-$.12) 22.27( P / A. 0..932.'*$ *** &.5% / 12 0. Park.75%. Pearson Education. Upper Saddle River. storage in a retrieval system. i1 5.75% per month .0($ !!0+!* $228. Upper Saddle River. NJ 07458.+!( $130. write to: Rights and Permissions Department. i.

- List of Some Solut0on Manuals
- 1 - Solution 2013
- Tentamen systemteknik SF2863 KTH
- Chapter 04
- Park - Fundamentals of Engineering Economics_ 2nd Edition_solution Manual_ch2
- Proses Bulk Validation
- Park - Fundamentals of Engineering Economics, 2nd Edition_solution Manual_ch0
- Park - Fundamentals of Engineering Economics_ 2nd Edition_solution Manual_ch3
- Chapter 05
- Chapter 03
- MACT 3311 - Chapter 3
- Chapter 01
- steel_design
- Chapter 8 Soluciones
- Chapter 05
- Ishu Main File
- Kt(Fr) Studio(21.05sqm)
- Kumagawa -2BR(44.1sqm)
- fcic_testimony_hollis_20100923.pdf
- Interest Rate for Loans Advances
- Chapter I
- GENERAL AGREEMENT FOR AVAILING OF FINANCE FROM THE NATIONAL MINORITIES DEVELOPMENT AND FINANCE CORPORATION
- 15022882
- 2011 Informal Credit Systems in Fishing
- Kumagawa -1BR(33.5sqm)
- PEOPLE vs
- Glimpses of Treachery with Village India
- Amort Sheet (NEW)
- Chapter-9
- Ch14.rtf

- CFPB Closing Disclosure
- Promissory Note
- Mortgage Deed
- How You Got Screwed 1.0
- Advanced Business Calculations/Series-4-2011(Code3003)
- Howard Marks Fourth Quarter 2009 Memo
- IOU Form
- Ocwen Sample Aptitude Placement Paper Level1
- Restoring America's Future
- Accounting (IAS) Level 3/Series 2 2008 (Code 3902)
- Third Point Q4 Investor Letter TPOI
- Payment Agreement
- IceCap Asset Management Limited Global Markets 2013.2
- Note Payable
- 07-27 Debt Fiscal Crisis Brief
- Advanced Business Calculations Level 3/Series 2 2008 (Code 3003)
- Dynamic Repayment Act
- Ask Warren Buffett - Complete CNBC Squawk Box Transcript - March 1, 2010
- Accounting Level 3/ Series 4 2008 (3001)
- Jackson's $70-Mil Loan...Trustee Malnik, BofA Note and Sony
- Security Agreement
- Certificate in Advanced Business Calculations Level 3/series 3-2009
- Advanced Business Calculations/Series-2-2004 (Code3003)
- Jp Morgan Sample Aptitude Placement Paper Level1

Sign up to vote on this title

UsefulNot usefulRead Free for 30 Days

Cancel anytime.

Close Dialog## Are you sure?

This action might not be possible to undo. Are you sure you want to continue?

Close Dialog## This title now requires a credit

Use one of your book credits to continue reading from where you left off, or restart the preview.

Loading